Tuesday, February 23, 2010

PDC move out of Old Town – inevitable?

The Oregonian had another article about the potential move of Portland Development Commission (PDC) out of Old Town. PDC is a public agency that spends mostly property tax payers dollars for urban renewal and economic development. Their lease is up August 2011.

See my earlier post "PDC an Old Town asset" where I offered a few reasons why PDC's move would devastate Old Town. See too a recent Old Town blog post "PDC move – reality starting to sink in" that discusses the Oregonian article.

As noted in the Old Town blog – the August 2011 is not the date of concern. That date is the one by which PDC must notify the Kalberer Company, the landlord, of their intent to move. The closer one gets to that date the less likely any attempt to keep PDC in Old Town will be successful.

To expound more on the "PDC as an Old Town asset" theme - it is a fact that when a firm moves into an area the jobs that comes with the firm is multiplied in the community. That is, more jobs are are created to serve the needs of the relocating firm. Most are new jobs – not ones already extant in the community.

But a public agency like PDC causes more jobs to be created in the local area than would be by a private firm. PDC as an urban renewal agency has brought into Old Town firms, e. g., architecture businesses, that serve and feed off of their urban renewal activities.

Not only is there a job multiplier, there is a reverse multiplier too. If PDC moves, the firms that relocated to Old Town can be expected to move again; thus, the jobs created by the original move will cease to exist.

The loss of these jobs on the exit of PDC may well be larger than those created by the original multiplier. Commercial property owners or lessors may be hardest hit because many retail and office spaces are leased only because of PDC.

PDC has helped spawn a variety of retail stores that serves the residents as well as PDC employees. A loss of these stores, or decrease in their services, will likely be an incentive for residents to move out of Old Town.

Also, the residents of Old Town's one condo building will face a decrease in property values that will lead to an exodus. Old Town will face a negative gentrification. "Get out while you can" will be the theme of the day.

A decrease in the number of businesses will affect public safety in Old Town as well as its cleanliness. Old Town relies mainly on the Portland Business Alliance under its Clean and Safe services to provide security (Portland Patrol) as well as sidewalk and other cleaning services. Portland Business Alliance is basically funded by businesses in the downtown area which includes Old Town.

Thus, one can expect an economic downward spiral, with its accompanying and accumulating negative effects, that will decimate Old Town and return it to the skid row days.

Chicken little? I don't think so.

© 2010